Liverpool council considered telling the public that they could use its municipal cemeteries provided they made "their own arrangements for gravedigging" at the height of 1979's winter of discontent, according to the newly released cabinet papers.

The macabre minutes of the secretive "central contingencies unit" show that in the face of a strike by local authority gravediggers and crematorium staff, Whitehall officials considered bringing in private contractors to do the job but feared this could lead to "unseemly scenes at cemetery gates" involving union pickets.

"A scene involving contractors digging graves for a later burial could coincide with a mourning party arriving," they warned.

The use of troops was discussed by the committee, chaired by Gerald Kaufman. The files show that only 80 gravediggers were on strike in Liverpool and Tameside, Greater Manchester, in January 1979 as part of public sector strikes that contributed to the last days of James Callaghan's government, although the particular dispute later spread to other towns including Brighton and Hyndburn.

The sight of rubbish piling up in London's Leicester Square and the fact that the dead went unburied in Liverpool provided two lasting images of the 1979 winter of discontent.

A Department of Environment note shows that at the height of the dispute there were 150 unburied bodies stored in a factory in Speke, with 25 more added every day.

The bodies could be kept for up to six weeks in heat-sealed plastic bags but this option was regarded as "totally unacceptable for aesthetic reasons.

"Liverpool have considered, but do not really favour, informing the public that they can use municipal cemeteries provided they make their own arrangements for gravedigging ... it is likely the relatives would employ somebody to do the actual workTameside have identified a contractor who would be willing to undertake grave-digging. Both are holding their hand until the government gives some indication that they should act," records the note. It adds that very few people would have "the skill or the strength" to dig a grave.

Ministers were told that the alternative of using supervisory staff to operate municipal crematoria was not possible because it would have prejudiced the temporary mortuary arrangements which depended on the goodwill of the unions.The file also show that the Ministry of Defence seriously considered using troops but said very young troops would find it "extremely distasteful".